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Striking S.African workers to vote new wage offer
Source: Agencies |
August 31, 2010, Tuesday
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STRIKING South African state workers will vote yesterday on an increased wage offer made by the government to try to end a nearly three-week-old strike, the COSATU union federation said.
The government increased its offer to 7.5 percent from 7 percent -- compared to the union demand for 8.6 percent -- after being ordered back to negotiations by President Jacob Zuma, under growing political pressure over the stoppages.
The strike has closed schools, prevented treatment at hospitals and harmed investor sentiment in Africa's biggest economy.
"The offer will be discussed by members today and they will vote on whether to accept the new offer," COSATU President Sidumo Dlamini told Reuters. "We don't know what members will do. Indeed there has been a shift and we expect members to look at it critically."
Union officials said a decision on whether to accept the new offer is likely to come early on Wednesday.
Analysts said the new offer could lead to an end of the worst labour action in terms of man-days lost in three years.
"There is a reasonable prospect that we are going to get this settled," said Gary van Staden, political analyst with NKC, independent economists.
As well as the proposed wage increase, the government raised its offer for a monthly housing allowance to 800 rand (US$109). Unions have been demanding 1,000 rand.
Rank and file members, feeling the pinch from lost wages coming from the government's policy of "no-work, no pay" for strikers, may want to end the dispute to prevent even more harm to their finances, he said.
WIDER STRIKE
Although its impact on currency, bond and stock markets has been minimal so far, that could change if the strike spreads to the broader economy. COSATU has threatened a one-day sympathy strike by all members on Thursday if no deal is reached.
"At this stage, the sympathy strike on Thursday is on hold," Dlamini said. That strike by nearly 2 million members of affiliated unions would hit industries such as mining, manufacturing and communications.
COSATU Secretary-General Zwelinzima Vavi said the group was still ready to up the stakes: "We have already mobilised for a strike on Thursday. If the offer is rejected, then we are ready for the mass strike."
Any agreement to end the dispute is likely to swell state spending by about 1 to 2 percent, forcing the government to find new funds just as it tries to bring down a deficit totalling 6.7 percent of gross domestic product.
There are worries that the deal could lead to higher taxes or cause South Africa to increase its borrowing, making it more costly to obtain loans and leading to increased budget spending to pay for servicing the debt.
"I think that it is more likely that we are going to see an increase in borrowing, " van Staden said. "They really do have to start worrying about their sovereign rating."
State workers said members would be angry the proposed pay rises were lower than those the government earlier this year to workers at major state-owned enterprises. They won raises more than double inflation, which stood at 3.7 percent.
"The sore point is that parastatals received exceptional increases despite their reliance on bailouts from the state because their finances are in a mess," said a public sector paramedic.
Workers have also been angry at the large wage gap between the lowest and highest paid civil servants. The lowest paid state employees make about 40 percent less than the average worker in South Africa, who takes home about 6,300 rand a month in salary and benefits.
"I earn 9,000 rand a month. After deductions I bring home about 5,000. If I worked in the private sector I would earn much more," the paramedic said.
The government increased its offer to 7.5 percent from 7 percent -- compared to the union demand for 8.6 percent -- after being ordered back to negotiations by President Jacob Zuma, under growing political pressure over the stoppages.
The strike has closed schools, prevented treatment at hospitals and harmed investor sentiment in Africa's biggest economy.
"The offer will be discussed by members today and they will vote on whether to accept the new offer," COSATU President Sidumo Dlamini told Reuters. "We don't know what members will do. Indeed there has been a shift and we expect members to look at it critically."
Union officials said a decision on whether to accept the new offer is likely to come early on Wednesday.
Analysts said the new offer could lead to an end of the worst labour action in terms of man-days lost in three years.
"There is a reasonable prospect that we are going to get this settled," said Gary van Staden, political analyst with NKC, independent economists.
As well as the proposed wage increase, the government raised its offer for a monthly housing allowance to 800 rand (US$109). Unions have been demanding 1,000 rand.
Rank and file members, feeling the pinch from lost wages coming from the government's policy of "no-work, no pay" for strikers, may want to end the dispute to prevent even more harm to their finances, he said.
WIDER STRIKE
Although its impact on currency, bond and stock markets has been minimal so far, that could change if the strike spreads to the broader economy. COSATU has threatened a one-day sympathy strike by all members on Thursday if no deal is reached.
"At this stage, the sympathy strike on Thursday is on hold," Dlamini said. That strike by nearly 2 million members of affiliated unions would hit industries such as mining, manufacturing and communications.
COSATU Secretary-General Zwelinzima Vavi said the group was still ready to up the stakes: "We have already mobilised for a strike on Thursday. If the offer is rejected, then we are ready for the mass strike."
Any agreement to end the dispute is likely to swell state spending by about 1 to 2 percent, forcing the government to find new funds just as it tries to bring down a deficit totalling 6.7 percent of gross domestic product.
There are worries that the deal could lead to higher taxes or cause South Africa to increase its borrowing, making it more costly to obtain loans and leading to increased budget spending to pay for servicing the debt.
"I think that it is more likely that we are going to see an increase in borrowing, " van Staden said. "They really do have to start worrying about their sovereign rating."
State workers said members would be angry the proposed pay rises were lower than those the government earlier this year to workers at major state-owned enterprises. They won raises more than double inflation, which stood at 3.7 percent.
"The sore point is that parastatals received exceptional increases despite their reliance on bailouts from the state because their finances are in a mess," said a public sector paramedic.
Workers have also been angry at the large wage gap between the lowest and highest paid civil servants. The lowest paid state employees make about 40 percent less than the average worker in South Africa, who takes home about 6,300 rand a month in salary and benefits.
"I earn 9,000 rand a month. After deductions I bring home about 5,000. If I worked in the private sector I would earn much more," the paramedic said.
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